Slivers of normalcy: Air New Zealand lounges reopening

Two weeks ago New Zealand lowered its COVID-19 alert status to Level 2, opening the opportunity for increased personal travel. In parallel with that shift Air New Zealand began to ramp up its network and capacity, shifting from critical services to meet the demands of the more flexible policies. There are still limits in place, but this week marks another milestone as some of the carrier’s airport lounges resume a limited service.

In line with government regulations, our self-service buffet won’t be available. Instead, customers will be required to be seated once they enter the lounge and there’ll be table service with packaged snacks on offer, as well as beverages.

– Air New Zealand General Manager Customer Experience Nikki Goodman

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Limited amenities, but the lounges are open

The Level 2 restrictions require that the carrier limit the number of passengers in the lounges. While the overall lower passenger numbers will help control the crowding the hard cap of 100 people in the lounge is mandated by the New Zealand government. Passengers are asked to remain seated while in the lounge.

The carrier also removed the buffet service in the lounges, as well as all alcohol options. Passengers will, however, have access to packaged snacks along with coffee and other non-alcoholic drinks. All service will be provided at the seat/table by Air New Zealand lounge staff.

Twelve lounges are reopening to start, including the Auckland Regional, Wellington Domestic and Christchurch Domestic facilities. Regional lounges in Hamilton, Tauranga, Napier, New Plymouth, Palmerston North, Nelson, Queenstown, Dunedin, and Invercargill are also open again under the new policies.

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Adjusting the on-board experience

The limited lounge service is similarly mirrored in the air. Water will be available for travelers but all other onboard snack and drink service is suspended. Wearing face masks is not required, but the carrier will make masks available to those who request them on board.

The airline is flying significantly more capacity than is being filled as it maintains blocked seating on board. As part of the blocked seating effort the carrier worked with its ancillary marketing team and technology providers to modify the blocked seats algorithm. Rather than a wholesale suspension of middle seat sales the carrier will allow groups on the same booking to occupy the adjacent seats. This translates into roughly 5% more capacity on average, or 15,000 more seats through the end of June.

Tracking the recovery curve

On May 12th the airline carried fewer than 1000 passengers. The country shifted from Level 3 to Level 2 the following day and operation numbers steadily increased since. A week in to the Level 2 scenario and the carrier passed 5,000 daily passengers. In normal times Air New Zealand would have carried approximately 30,000 domestic passengers, so the numbers are still significantly depressed.

The carrier is also cautiously optimistic, but Chief Revenue Officer Cam Wallace observed that the numbers were “stabilizing at these lower levels.” Getting past the initial burst of pent-up demand to a more stable business travel environment will be a key transition for the company.

Every market is different so extrapolating domestic demand from one country to the next is a tricky task. China’s recovery definitely plateaued, however, and a couple months on has not shown much in the way of pushing past that “new normal” lower level of demand.

How that plays out in New Zealand will challenge the company, but thus far it has been represented through impressive flexibility and responsiveness as they adjust routes and capacity frequently in response to demand.